alex: stocks rising,.4 of 1% of a all-time high. european equities rising, a seven-week low and the that's back closing at a record high. you the question is what's miss? key drivers to keep your eye when the report crosses in just a moment. alex: milk, how slumping diary prices in tiny faraway new zealand are causing big ripples worldwide and why it matters. joe: and the stock market reels from a $4 trillion rout and we learn whether markets have further to fall. alex: we begin with the stock market. we are closing at a record level here for the nasdaq. the s&p is closing right around the record high with virtually

no big catalyst today for stocks. joe: i'm amuses by it all, everyone was panicking and here we are. alex: nevertheless, we are looking at the weakest quarter for earnings since the financial crisis, revenue down about 4.5%. the last time we saw that kind of decline was in the third quarter of 2009 down about 10%. joe: more people say last quarter was the worst ever and it turned out to not be that bad. alex: that's true, i don't mean to be nice about it, but analysts aren't right all the time. 47 of the s&p companies have reported earnings. we have seen a.1 of 1% increase for revenue and 5% increase for earnings meaning yes, the estimates are not correct. joe: a little sample that we have already gotten it looks like this quarter won't be as bad or is it too early? alex: definitely we are seeing revisions up in terms of earnings and revenue earnings tend to outpace that versus

revenue. we'll see. joe: something we will be watching. alex: we are waiting on the google earnings, i should point out, joe, julie is looking at those earnings. give us some of the headlines. julie: a couple of headlines, i try to click on the actual leads and getting an error message, there it is. basis 699, you talk about analyst estimates, 673 was the average and we also see a revenue number of 17.7 billion. i'm not sure if that is the -- here we go, acquisitions costs 14.35 billion, a little bit better than estimated. we're looking at the costs per click number which is down 11%. that's more than double what was estimated. that's an important number there. what is google paying, what are its expenses to get those clicks from people, paid clicks of 18%. the estimate there up 14%. by both of those measures,

costs her click is down more than estimated, paid clicks up more than estimated. it looks like the company is coming in better than had been estimated here. just sort of scrolling through the statement right now as we look at the numbers, the c.f.o., strong second-quarter results reflect continued growth across the rest of our products. she says notably core search is doing well and youtube and problematic advertising, also areas of strength. she is also saying, this is interesting here, given that we have been talking a little bit about google's costs. we are focused every day on developing by new opportunities across a wide range of businesses. we will do so with great care regarding resource allocation because there has been some concern about that resource allocation, how much is google spending on moon shots, for example, and on big projects given the yield that it may get from those projects.

so some interesting commentary there as the numbers look relative strong here out of the gate. i'm not sure if we checked the stock yet, but i do want to do that before i get back to you. up 8:00 here. strong reaction to these numbers so far. alex: thank you so much julie. i want to take a deep dive into my terminal on something you may have missed in the last few days and that is the mexican peso, it is down over 1% versus a dollar in the last two days, sure, you had a strong dollar, but this was also about a failed oil fail in mexico yesterday. joe: you were really excited about this story. alex: i was so pumped about it and didn't get to talk about it. they sold out 14 blocks and only got allocation for two, bill oil completely left the room, they are not interested even though they are already prequalified. the reason why it's important, the reason why you're seeing the peso take a dive is because this was the president's revamp

of the economy, trying to open up the world of oil, get about $60 million of revenue over the next few years and it did not work. joe: there is more rounds of this auction, right, it's not over? alex: correct, there is multiple rounds. we'll see hundreds of blocks auctioned off. off the bat, his reforms were not working. there was not the confidence to invest in mexico, bam, the peso. joe: i want to take a dive into the terminal and talk about the currency. now that greece has faded, the center of the world is wellington, new zealand. the new zealand is at its lowest level since 2009. here is a line going back to then. why is it collapsing? one word, milk, wild gold, it's been falling, there is lower demand, there is more supply, ireland is flooding the market. there are all kinds of things. the here is an economy in which one of the most economic indicators is the regular milk auction that they have. it's been very weak. you can see it in the kiwi

plunking very dramatically to a six-year row. alex: i love that, talking about milk. joining is jonathan, chief u.s. market strategist, earning season really in full swing, what's your take on google, what's the significance of google for the s&p, for the nasdaq when we see this kind of revenue growth? jonathan: there are two stories, the first one is secular growth ideas. these are companies that can win, not because the economy is better, but because they're innovating and taking mine share. they have been the winners this year. you see those names in technology. you see them in health care and you see them in consumer discretionary. in technology, it's not all of tech winning, it's really the newer tech ideas and google is the heart of that. joe: what is your milk forecast? just kidding. alex: do you have one? joe: you have something called the 10% oil and dollar rule, what is this? jonathan: we get a lot of questions on the impact of the

dollar and oil on standard & poor's earnings. most people think that when oil goes up that is a drag on earnings. in fact, the energy sector does so well on rising oil that for every 10% move up in oil, you get a 1% increase in earnings. unfortunately, oil is down about 50% versus a year ago. so it's a really big drag. the dollar which everyone is concerned about is also a 10% move, but in the opposite direction. so when the dollar gets stronger, it is a drag because u.s. companies are less competitive. unfortunately, the dollar strengthened, that's a drag this quarter as well. you have a drag from both, about 600 basis points, you're talking about how weak earnings are this quarter, 600 basis points of those weakness is coming from oil and the dollar. joe: do you agree with analysts that is likely to be the weak nest quarter since the financial crisis? jonathan: it is predicted to be, we'll see earnings well over 4%.

before google's's numbers, we're beating about 4.5. last quarter was 7, we'll have a bigger than expected to beat. the second thing is you kind of have to handicap or take out that energy number because it so skews the overall result, it makes the trend look much worse than it is. alex: how much of the earnings growth is actual growth versus just buybacks. jonathan: of the e.p.s. number, you have 3 1/2 to 4% growth that is revenues. that is what analysts are focused on, you have 1 1/2 to 2% that is market expansion. people say how much longer can margins go higher and higher, the answer is probably longer than you think and then you're getting 1 1/2 more on buyback. it's a little bit of everything. joe: on that market expansion question, where is there room to grow? jonathan: it's really simple. if you're growing your revenue by 3 1/2 or 4%, but companies are really managing their expenses so that they grow at 2 1/2 to 3, they simply are

growing their revenues incrementally faster than they are growing their expense line. it really is about prudent expense management. if you ask a single point, interest expense is actually a less of a drag than it normally be because interest rates are low and companies are carrying less debt than normal. alex: we talk about china and greece, what is the crisis we're not talking about? jonathan: that's a hard question. if the market didn't even correct by 3% on either china or greece, i'm not seeing something that would be really concerning. the one thing that makes me most concerned is if inflation moves up faster than people think, especially on wages, that could force the fed to take a more aggressive posture and that would be bad for the market. i don't see it out, but it's a single thing that i'm concerned about. joe: so there is one thing that would change your outlook, you would definitely say is the wage inflation number.

jonathan: if i would think it's up, i would take down my market call, not an aggressive call. joe: thank you for joining us, jonathan of r.b.c. alex: still ahead, we'll dig into the google earnings that crossed just moments ago, stay with us. joe: after the break, the one chart that proved europe handled at least one thing right during the greek crisis. ♪ ♪

alex: i'm alex steele. oe: i'm joe wisen that will. "what'd you miss?," europe in the greece disaster has been incredible. alex: i want to show the monthly swing in the euro's value against the dollar this year alone and the ranges are

getting narrower and narrower even though the crisis is getting hotter and hotter, basically suggesting euro traders couldn't care less if greece exits the euro. joe: he had no leverage, financial markets weren't worried about greece. when there is no ripple effect, hard to extract any concessions. alex: good point. let's get to the top headlines this afternoon. a barrage of gunfire today at two military facilities in chattanooga tennessee, four others were injured. a u.s. attorney is calling the killings an act of domestic terrorism. president obama has been briefed by his national security team on that violence. joe: another day of testimony today by federal reserve chair janet yellen, this time before the senate banking committee. yellen told lawmakers that raising rates too late holds risks along with tightening too quickly. the u.s. job market is returning to a "more normal

state" even though the unemployment rate understates the degree of slack. alex: an agency has failed to send funds for bond payments because they haven't appropriated the money. two u.s. senators suggest that the puerto rican businesses file for protection like u.s. cities. puerto rico, $72 billion in the red. and those are your top headlines. well, google's second-quarter earnings topping analysts, stock is up over 7% in afterhours training. cory has been dissecting them for us. you are focusing on that c.p.c. number. cory: the quarter looks really strong as businesses are growing at a really nice pace and getting more and more profitable and traffic acquisition costs are falling, numbers are looking good. one of the numbers that really demonstrates how much people are using google, how good it is to be google is the cost per

click number, the click growth. the clicks on google's ads are increasing at a pretty dramatic pace actually, accelerating pace. so clicks have been increasing in the 20% range, 26%, 25%, 17%, and then they started picking up here, down at 13%, which is good, bam, this quarter, 18% growth in clicks, that's really good news for these guys. except -- joe: here is the catch. cory: the value of those clicks or ads are getting worse and a lot worse and dramatically worse. right now, there was a belief not too long ago that when we shifted from desk top to mobile that the value of the clicks would go down, but once we have been on mobile for a while, we'll stop seeing the degradation of value of the clicks. look at that number, it broke our charts. 11% right there. joe: it was so bad -- cory: it

was so bad, it broke our charts. can you imagine. that 11%, that's a very bad number. there are analysts out there, some day mobile clicks will be worth more than desk top clicks. joe: this is very long term potential threat to google, the idea they were great for the era when we all searches and apps and mobile, this is a real problem. cory: we don't see the effect of apps, when you're looking for open table, you don't go to google and seven for it, you go to the app or the uber app, you don't interact with google. we don't see the impact that much in these numbers. the value of mobile ads continues to massively erode and that's bad news. alex: good stuff. cory: the new c.f.o., as julie mentioned, there is talk of cutting costs a little bit, but you want to look -- joe: she mentioned, julie

mentioned it in the press release that she was talking about discipline with resources, did we learn anything from the report about that? cory: it's only the first quarter there, she is not ruffling too many feathers i can only hope. you see the change in google's head count. they increased the head count once again, 57,412 people at the end of the quarter and yes, that is more people than google has ever employed, forgetting the motorola acquisition, we could call it a mistake. this is the slowest rate of increase we have seen for years in google. alex: thank you so much. cory johnson, bloomberg editor at charge. earnings just crossed, slummer jay, a revenue came in at about $9 billion, about 25% decline here on here. the other big headline that caught my eye, investment spending into north america should also be down by about

35% in 2015. that, of course, is doing to the fallen oil prices and the effect on shale but also international spending is going to drop more than 15%. actual spending has held up a lot better here in north america because there is not that shale. joe: we talk about earnings and weakness of energy. alex: it's where you feel the pain the most. joe: when we see the big drop, this is where we see it. alex: check out these companies when they report earnings. wow, investment down 35% in north america. joe: huge. brazil's currency took a plunk today, we tell you why after the break. ♪ ♪

>> i always challenge myself of not repeating myself in a way and using new technologies or i enting new ideas and think it has its

alex: i'm alex steele. joe: and i'm joe. "what'd you miss?." alex: we talk about a plunk in brazil's currency. it fell after it was reported hat federal prosecutor's are investigating allegations of influence peddling. joe: they are probing whether he used his influence in panama and venezuela. alex: can't get a break. reform, what reform. they can't get it together. china has 40% of outstanding global corporate debt over the next four years. at $23 trillion, that poses a huge risk to the credit market. joe: on the equities side, cheans stocks have lost 20% causing that country's government to take drastic steps to try and stop the fall. alex: earlier this week, joe d i spoke with chief economist about whether these

moves will work or not. george: it basically runs the country, it owns the banks. it has ewing holdings in state enterprises. pretty much what it says goes. so having unleashed market forces in the form of a more kind of vibrant stock market over a year or maybe 18 months ago, i think that, i think they have been spooked, to be honest, by what markets do and actually bringing markets with chinese characteristics into the chinese economy is clearly one of the objectives that their leadership set a couple years ago. i don't think they like the results. alex: george, what is the risk of it not working if the country at any time actually prop up the stock market? george: to be honest with you, i don't think it's that important from the point of view of the cheans economy of what goes on in the stock market. it's not really a market in the way we understand a market.

i think it's quite revealing about the cheans government's approach to managing markets in a modern economy and the objective which they have set themselves in bringing markets into the process of economic reform. i mean, what i mean by reveals, it means that it's not very encouraging that this process is going to be, go very far or be very effective. joe: what do you see as the result way this plays out if they continued to try to guide markets so aggressively? george: i think we're going back to where we came from, sort of a shanghai, going back 2,800. around 2,500, i don't have a strong sense as to whether that is going to happen next week, next month or whether it will be over the next half year or so. i suspect it will take a bit longer and that will be the tools in which the authorities can wheel out to prop up the

market are not exhaustive. they have a lot money they can throw at it. alex: 2,500, 2,800 seems like a really bold call. you don't have a time frame for that. is there a fundamental catalyst that you see? george: well, i think that, you know, if we put it into perspective, the kind of 150% rise in the value of the index between the spring of 2014 and june of 2015 took place at a time when the economy was slowing down, when corporate earnings, s.o.e. earnings had been under pressure and when generally speaking, you know, some of the issues, i mean the negative issues associated with an important economic transition have really been coming through. so the market's bull phase had really nothing to do with the economy. what i suppose i'm worried about here is that we look forward over the next six months to 12 months, i think that those processes will continue, in other words, the

economy will continue to decelerate. joe: george, we talk about the short-term moves that chinese regulators do to move the economy one way or the other. what about the long term multidecade plan. you wrote this spring about the new silk road, china's trading ambition. real quickly, what do you see as china's long-term economic strategy? george: here we have exactly one classic example about how that strategy, well thought out that it might be, and certainly will be profitable for companies that can build the infrastructure china wants, but we do have a problem here which is if internationalization of the r.i.b. doesn't proceed as they want it to proceed because foreigners and foreign investors are a little bit anxious about what the cheans mean by marketization and if the capital markets, the stock market, the attraction of foreign capital into china looks to be compromised by heavy-handed management as we have just seen, then i think

that process of internationalization is going to be held up or slowed down and some of those objectives will not be as dramatic as i think the hyperbole would have us believe. alex: that was george magnus. joe: we'll be right back. ♪ ♪

alex: i'm alex steel. joe: i'm joe. "what'd you miss?." alex: what you missed is conoco phillips raising its dividend to 74 cents a share. joe, this really caught my attention because big oil has been struggling to turn a net profit, struggling to see its share price grow, yet they continue to pump money into its dividend. conoco's free cash flow is currently a negative 4.2 million. joe: another thing, german parliamentary vote on that

greek bailout pretty much expected to pass. you still got to watch these things. alex: revolt. joe: that's all for "what'd you miss?." thanks for watching. alex: see you back here tomorrow, guys, have a great afternoon. emily: google shares are rising

in after-hours trading. concernednvestors are that they won't be able to keep themselves in check. ♪ i'm emily chang and this is "bloomberg west." coming up, highlights from my studio 1.0 interview. new ceo is taking steps to define the site's policy. i willjo